SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 =========================================================================== FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended Commission File Number MARCH 31, 1998 1-3574 HASTINGS MANUFACTURING COMPANY (Exact name of registrant as specified in its charter) MICHIGAN 38-0633740 (State or other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 325 NORTH HANOVER STREET HASTINGS, MICHIGAN 49058 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: 616-945-2491 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes __X__ No _____ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. OUTSTANDING AT CLASS APRIL 23, 1998 ----- -------------- Common stock, $2 par value 783,926 shares =========================================================================== Hastings Manufacturing Company and Subsidiaries Contents ==================================================== PART I - FINANCIAL INFORMATION PAGE ---- Item 1 - Financial Statements: Report on Review by Independent Certified Public Accountants 3 Condensed Consolidated Balance Sheets - March 31, 1998 and December 31, 1997 4-5 Condensed Consolidated Statements of Operations - Three Months Ended March 31, 1998 and 1997 6 Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 1998 and 1997 7 Notes to Condensed Consolidated Financial Statements 8-9 Review by Independent Certified Public Accountants 10 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 11-15 PART II - OTHER INFORMATION Item 2 - Changes in Securities and Use of Proceeds 16 Item 6 - Exhibits and Reports on Form 8-K 16 -2- Report on Review by Independent Certified Public Accountants ============================================ Board of Directors Hastings Manufacturing Company Hastings, Michigan We have reviewed the accompanying condensed consolidated balance sheets of Hastings Manufacturing Company and subsidiaries as of March 31, 1998, and the related condensed consolidated statements of operations and cash flows for the three-month periods ended March 31, 1998 and 1997, included in the accompanying Securities and Exchange Commission Form 10-Q for the period ended March 31, 1998. These condensed consolidated financial statements are the responsibility of the Company's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying condensed consolidated financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 1997, and the related consolidated statements of operations, stockholders' equity and cash flows for the year then ended (not presented herein). In our report dated February 27, 1998, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1997, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. /s/BDO Seidman, LLP BDO Seidman, LLP Grand Rapids, Michigan April 23, 1998 -3- PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Hastings Manufacturing Company and Subsidiaries Condensed Consolidated Balance Sheets ===================================== MARCH 31, DECEMBER 31, 1998 1997 ----------- ----------- ASSETS CURRENT ASSETS Cash $ 29,359 $ 558,172 Accounts receivable, less allowance for possible losses of $260,000 and $215,000 6,506,865 5,148,906 Refundable income taxes 11,044 13,475 Inventories: Finished products 7,633,765 7,460,534 Work in process 474,914 572,307 Raw materials 1,551,690 1,239,657 Prepaid expenses and other assets 93,624 75,669 Future income tax benefits 2,104,687 2,351,687 Other current assets 966,634 958,517 ----------- ----------- TOTAL CURRENT ASSETS 19,372,582 18,378,924 ----------- ----------- PROPERTY AND EQUIPMENT Land and improvements 659,792 658,243 Buildings 4,701,538 4,633,937 Machinery and equipment 18,576,610 18,180,840 ----------- ----------- 23,937,940 23,473,020 Less accumulated depreciation 15,532,733 15,156,120 ----------- ----------- NET PROPERTY AND EQUIPMENT 8,405,207 8,316,900 ----------- ----------- INTANGIBLE PENSION ASSET 815,189 815,189 -4- FUTURE INCOME TAX BENEFITS 5,828,066 5,828,923 OTHER ASSETS 38,066 50,395 $34,459,110 $33,390,331 =========== =========== -5- Hastings Manufacturing Company and Subsidiaries Condensed Consolidated Balance Sheets ===================================== MARCH 31, DECEMBER 31, 1998 1997 ----------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Notes payable to banks $ 4,500,000 $ 3,400,000 Accounts payable 1,411,627 1,475,098 Accruals: Compensation 487,655 494,781 Pension plan contribution 685,173 608,786 Taxes other than income 161,729 172,854 Income taxes 26,802 - Miscellaneous 305,960 217,731 Current portion of postretirement benefit obligation 1,110,442 1,110,442 Current maturities of long-term debt 1,462,500 1,462,500 ----------- ----------- TOTAL CURRENT LIABILITIES 10,151,888 8,942,192 LONG-TERM DEBT, less current maturities 200,000 565,625 PENSION AND DEFERRED COMPENSATION OBLIGATIONS, less current portion 3,236,880 3,243,618 POSTRETIREMENT BENEFIT OBLIGATION, less current portion 15,071,930 15,318,770 ----------- ----------- TOTAL LIABILITIES 28,660,698 28,070,205 ----------- ----------- STOCKHOLDERS' EQUITY Preferred stock, $2 par value, authorized and unissued 500,000 shares - - -6- Common stock, $2 par value, 1,750,000 shares authorized; 783,926 and 780,626 shares issued and outstanding 1,567,852 1,561,252 Additional paid-in capital 245,532 145,788 Retained earnings 6,149,400 5,793,219 Accumulated other comprehensive income (Note 5): Cumulative foreign currency translation adjustment (734,894) (750,655) Pension liability adjustment (1,429,478) (1,429,478) ----------- ----------- TOTAL STOCKHOLDERS' EQUITY 5,798,412 5,320,126 ----------- ----------- $34,459,110 $33,390,331 =========== =========== See accompanying independent accountants' review report and notes to condensed consolidated financial statements. -7- Hastings Manufacturing Company and Subsidiaries Condensed Consolidated Statements of Operations ========================================= Three months ended March 31, 1998 1997 ---------- ---------- NET SALES $9,946,018 $8,752,157 COST OF SALES 6,771,980 5,929,257 ---------- ---------- Gross profit 3,174,038 2,822,900 ---------- ---------- OPERATING EXPENSES Advertising 97,566 107,018 Selling 760,036 799,175 General and administrative 1,504,124 1,446,481 ---------- ---------- 2,361,726 2,352,674 ---------- ---------- Operating income 812,312 470,226 ---------- ---------- OTHER EXPENSE (INCOME) Interest expense 109,130 123,103 Interest income (8,117) (9,121) Other, net 1,024 1,169 ---------- ---------- 102,037 115,151 ---------- ---------- Income before income tax expense 710,275 355,075 INCOME TAX EXPENSE 292,000 142,000 ---------- ---------- NET INCOME $ 418,275 $ 213,075 ========== ========== BASIC AND DILUTED NET INCOME PER SHARE OF COMMON STOCK (Notes 4 and 6) $ .54 $ .28 -8- DIVIDENDS PER SHARE OF COMMON STOCK (Note 6) $ .075 $ .05 See accompanying independent accountants' review report and notes to condensed consolidated financial statements. -9- Hastings Manufacturing Company and Subsidiaries Condensed Consolidated Statements of Cash Flows ======================================== Three months ended March 31, 1998 1997 ----------- ----------- OPERATING ACTIVITIES Net income $ 418,275 $ 213,075 Adjustments to reconcile net income to net cash from (for) operating activities: Depreciation 371,456 334,100 Deferred income taxes 247,000 117,500 Change in postretirement benefit obligation (246,840) (75,736) Changes in operating assets and liabilities: Accounts receivable (1,354,834) (58,985) Refundable income taxes 2,487 1,537 Inventories (380,735) 87,080 Prepaid expenses and other current assets (26,056) 47,535 Other assets 12,329 (79,082) Accounts payable and accruals 204,571 (470,814) ----------- ----------- Net cash from (for) operating activities (752,347) 116,210 ----------- ----------- INVESTING ACTIVITY Capital expenditures (453,768) (779,735) ----------- ----------- FINANCING ACTIVITIES Proceeds from issuance of notes payable to banks 1,900,000 1,700,000 Principal payments on notes payable to banks (800,000) (2,000,000) Principal payments on long-term debt (365,625) (365,625) Dividends paid (58,794) (39,090) ----------- ----------- Net cash from (for) financing activities 675,581 (704,715) ----------- ----------- -10- EFFECT OF EXCHANGE RATE CHANGES ON CASH 1,721 1,675 ----------- ----------- NET DECREASE IN CASH (528,813) (1,366,565) CASH, beginning of period 558,172 1,457,783 ----------- ----------- CASH, end of period $ 29,359 $ 91,218 =========== =========== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period for: Interest $ 120,008 $ 126,145 Income taxes, net of refunds 8,885 8,766 See accompanying independent accountants' review report and notes to condensed consolidated financial statements. -11- Hastings Manufacturing Company and Subsidiaries Notes to Condensed Consolidated Financial Statements ==================================== NOTE 1 In the opinion of the management of Hastings Manufacturing Company and subsidiaries (Company), the accompanying unaudited condensed consolidated financial statements include all normal recurring adjustments considered necessary to present fairly the financial position as of March 31, 1998, and the results of operations and cash flows for the three months ended March 31, 1998 and 1997. NOTE 2 The results of operations for the three months ended March 31, 1998, are not necessarily indicative of the results for all of 1998. NOTE 3 The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances, transactions and stockholdings have been eliminated. The accompanying consolidated financial statements are condensed and do not contain all of the information and footnote disclosures required by generally accepted accounting principles in a complete set of financial statements. NOTE 4 In February 1997, Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share," was issued. This Statement simplifies the standards for computing earnings per share (EPS) and makes them comparable to international EPS standards. It requires the presentation of both "basic" and "diluted" EPS on the face of the income statement with a supplementary reconciliation of the numerators and denominators used in the calculations. The Statement was effective for financial statements issued for periods after December 15, 1997, including interim periods. A reconciliation of the numerators and denominators used in the "basic" and "diluted" EPS calculations follows: -12- Three months ended March 31, 1998 1997 -------- -------- Numerator: Net income used for both "basic" and "diluted" EPS calculation $418,275 $213,075 Denominator: ======== ======== Weighted average shares outstanding for the period - used for "basic" EPS calculation 771,496 768,516 Dilutive effect of stock options 1,031 - Weighted average shares outstanding -------- -------- for the period - used for "diluted" EPS calculation 772,527 768,516 ======== ======== SFAS No. 128 had no effect on EPS for the three-month period ended March 31, 1997. All outstanding shares have been adjusted for the two-for-one stock split discussed in Note 6. NOTE 5 SFAS No. 130, "Reporting Comprehensive Income," issued in June 1997, was adopted by the Company during the first quarter of 1998. This Statement requires that all components of comprehensive income and total comprehensive income be reported in one of the following: a statement of income and comprehensive income, a statement of comprehensive income or a statement of stockholders' equity. The Company has elected to report comprehensive income in its consolidated statement of stockholders' income (which is not presented for interim reporting purposes). Comprehensive income is comprised of net income and all changes to stockholders' equity, except those due to investments by owners and distributions to owners. For interim reporting purposes, SFAS 130 requires disclosures of total comprehensive income. Comprehensive income and its components consist of the following: -13- Three months ended March 31, 1998 1997 -------- -------- Net income $418,275 $213,075 Other comprehensive income, net of tax: Foreign currency translation adjustments 15,761 (25,122) Minimum pension liability adjustment - - -------- -------- Other comprehensive income 15,761 (25,122) -------- -------- Comprehensive income $434,036 $187,953 ======== ======== Accumulated comprehensive income totaled $2,164,372 and $2,180,133 at March 31, 1998 and December 31, 1997, respectively. NOTE 6 On February 17, 1998, the Board of Directors authorized a two-for- one stock split, effected in the form of a stock dividend, effective March 23, 1998, payable to shareholders of record on March 2, 1998. All references to number of common shares, except shares authorized, and to all per share information have been adjusted to reflect the stock split on a retroactive basis. -14- Hastings Manufacturing Company and Subsidiaries Review by Independent Certified Public Accountants ==================================== The March 31, 1998 and 1997, condensed consolidated financial statements included in this filing on Form 10-Q have been reviewed by BDO Seidman, LLP, Independent Certified Public Accountants, in accordance with established professional standards and procedures for such a review. -15- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS As noted in the Company's 1997 Annual Report, 1997 reflected four quarters of post-filter operating results. As such, no 1998 versus 1997 comparisons are impacted by that event. Certain comparisons between 1997 and 1996, however, continued to be impacted by the transition period following the filter assets and operations sale. While most of the transition effects were phased out by the third quarter of 1996, certain items, as detailed in previous filings, carried through the 1996 year end. RESULTS OF OPERATIONS NET SALES Net sales in the first quarter of 1998 increased $1,193,861, or 13.6%, from $8,752,157 in the first quarter of 1997 to $9,946,018. The 1998 increase reflects the Company's continued success within the domestic piston ring aftermarket combined with an acceleration of export volume. The domestic aftermarket growth further reflects the Company's focusing efforts begun in early 1996 as well as favorable competitive events within that market. As detailed in previous filings, the Company broadened its direct account export efforts throughout 1997. The success realized in early 1998 reflects, in part, the development and growth of those relationships. Net sales in the first quarter of 1997 declined $2,612,225, or 23%, from the first quarter of 1996. Filter operations had contributed $2,728,000 of net sales in the first quarter of 1996 resulting in a net increase of $116,000, or 1.3%, from the remaining products in the 1997 comparative period. While that increase was modest, the market sales mix changed between the two quarters. The 1997 results reflected a higher volume of domestic piston ring aftermarket sales offset, in part, by lower comparative export volume in early 1997. The export decline reflected the time delay of developing those markets following the termination of the exclusivity aspect of the Company's relationship with its previous export representative in late 1996. COST OF SALES AND GROSS PROFIT Cost of sales during the first quarter of 1998 increased $842,723, or 14.2%, from $5,929,257 in the first quarter of 1997 to $6,771,980. This increase mirrors the reported net sales gain with a slight decline in the generated gross profit margin on net sales from 32.3% in the first quarter of 1997 to 31.9% in the 1998 comparative period. This decline in the gross profit margin primarily reflects the impact of the sales mix change with its higher relative portion of export sales activity in the first quarter 1998. Those sales have traditionally not required the same level of gross profit margin as domestic sales due to the lower level of ongoing operating -16- support costs associated with the export markets. Through early 1998, the product cost factors (material, labor and overhead) have changed little from 1997. Though labor rates increased by 3% early in 1997, productivity gains have offset most of that adjustment. Cost of sales during the first quarter of 1997 decreased $2,373,657, or 28.6%, from the first quarter of 1996 to $5,929,257. A primary portion of this reduction resulted from the absence of any filter related activity in 1997. The gross profit margin realized on net sales improved in 1997 to 32.3% from 26.9% in the first quarter of 1996. That relationship was also a direct result of the filter sale as a minimal gross profit on filter products was generated through 1996 under the terms of the Transition Agreement with the acquirer of the filter operations. In addition to specific filter product costs included in the 1996 results, certain product-driven distribution and support operating costs are included in cost of sales. Following the 1996 relocation from the Knoxville facility, those operating costs decreased from $1,126,000 in the first quarter of 1996 to $740,000 in the first quarter of 1997. OPERATING EXPENSES Total operating expenses increased $9,052, or 0.4%, from $2,352,674 in the first quarter of 1997 to $2,361,726. Advertising costs declined slightly reflecting the inclusion of a biannual product catalog expense in 1997. Selling expenses, down $39,139, or 4.9%, reflect certain sales staff reductions realized in late 1997. This impacted both compensation-driven costs as well as support costs including travel and benefit costs. General and administrative costs increased $57,643, or 4.0%, from $1,446,481 in the first quarter of 1997 to $1,504,124. This increase reflects higher personnel support costs offset in part by further reduction in various expenses associated with the general office and corporate operations. The personnel support costs include approximately $50,000 of severance related to staffing reductions realized in early 1998. During 1997, the Company utilized the services of an outside consultant to assist in converting its computer systems to be Year 2000 compliant. At March 31, 1998, management believes the Company's core mainframe operating system and applications, its personal computer (PC) operating systems and the majority of its PC applications are compliant. The remaining PC applications are expected to be compliant during 1998 with the next software release or upgrade. Manufacturing equipment testing for Year 2000 compliance has been substantially completed with the remainder to be completed during 1998. The Company's software vendors have been contacted requesting assurances regarding Year 2000 compliance. Responses are in the process of being received and reviewed. Costs relating to the project during 1997, which approximated $110,000 for the entire year, were expensed as incurred. Future costs to be incurred to complete the Year 2000 project are not expected to be material. -17- OTHER EXPENSES Other expenses netted to $102,037 for the first quarter of 1998 compared to a net expense total of $115,151 for the first quarter of 1997. The net interest portion totaled $101,013 for the first quarter of 1997 versus $113,982 for the same period in 1997. Interest costs associated with the long-term debt obligations declined during the past year reflecting the normal amortization of those obligations. Short-term borrowings increased, however, through that same period reflecting increased working capital requirements which were driven by the net sales increase. The net result of these expense factors was a modest decline in net interest expense. The 1998 and 1997 results primarily reflect the interest income derived from the funds generated by the filter operations sale which are to be held in escrow through September of this year. TAXES ON INCOME The 1998 and 1997 effective tax rates of 41.1% and 40.0%, respectively, are higher than the domestic statutory rate due primarily to the impact of various state income taxes and the impact of a higher statutory rate applicable to earnings of the Canadian subsidiary. As of March 31, 1998, the Company recorded net deferred income tax assets of $7,932,753. The major components of that asset remain the tax effects of net operating loss carryforwards and accrued retirement and postretirement benefit obligations. The realization of this recorded benefit is dependent upon the generation of future taxable income. Management believes it is more likely than not that adequate levels of future taxable income will be generated to absorb the net operating loss carryforwards, the deductible amounts related to the retirement and postretirement benefit obligations and the remaining net deductible temporary differences. LIQUIDITY AND CAPITAL RESOURCES The Company's primary cash requirements continue to be for operating expenses, including labor costs and raw materials, and for funding accounts receivable, capital expenditures and long-term debt service. Historically, the Company's primary sources of cash have been from operations and from bank borrowings. Reflecting the full transition out of filter operations, and the favorable impact of the subsequent restructuring effort, the Company expects to generate sufficient future funds from operations and bank borrowings to fund its growth and operating needs. The short-term borrowing lines available to the Company as of March 31, 1998 totaled $6.2 million, of which $1.7 million was unused. This capacity was increased by $1.5 million during January 1998 to its current level in partial response to the sales increase thus far this year. -18- During the first quarter of 1998, the Company used $752,347 of net cash for operating activities. The realized net income, depreciation and deferred income taxes were offset by increased accounts receivable and inventory levels. The deferred income tax asset decline reflects the Company's favorable first quarter performance. The increased accounts receivable and inventory values reflect the working capital needs resulting from the higher sales level. The 1998 capital expenditures, at $453,768 through March 31, may approach the 1997 total of $1,770,302 as several significant capital projects are currently being considered. The financing activities for the first quarter of 1998 reflect the continued amortization of the Company's long-term obligations as well as the increased reliance upon short-term borrowings in response to the increased working capital needs. During the first quarter of 1997, the Company generated minimal net cash from operations as the realized net income, depreciation and deferred income taxes were nearly offset by the reduction in total accounts payable and accruals. Investing activities were quite high in the first quarter of 1997 reflecting the timing of several major projects. The financing activities for the first quarter of that year reflected the amortization of long-term debt obligations combined with a reduced volatility in the Company's short-term debt usage subsequent to the filter operations transition. As noted throughout the above discussion, the Company has realized increased activity thus far this year. That growth has resulted in an increased net income level combined with increased working capital demands. The Company will continue to monitor its working capital needs to balance its cash and growth demands. At this point, the Company anticipates that operations (which should be subject to minimal current cash outflows for U.S. income taxes due to utilization of the net operating loss carryforwards), in combination with the balancing of available short-term lines of credit with our operations, will generate cash flows sufficient to fund its working capital, capital outlays and dividend needs through 1998. NEW ACCOUNTING STANDARDS Statement of Financial Accounting Standards (SFAS) No. 131, "Disclosures about Segments of an Enterprise and Related Information," issued in June 1997 and which supersedes SFAS No. 14, "Financial Reporting for Segments of a Business Enterprise," establishes standards for the way that public companies report information about operating segments in annual financial statements and requires reporting of selected information about operating segments in interim financial statements issued to the public. It also establishes standards for disclosures regarding products and services, geographic areas and major customers. SFAS No. 131 defines operating segments as components of a company about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. -19- SFAS No. 132, "Employers' Disclosures about Pensions and Other Postretirement Benefits," issued in February 1998, revises employers' disclosures about pension and other postretirement benefit plans. It does not change the measurement or recognition of those plans. SFAS No. 132 standardizes the disclosure requirements to the extent practicable, requires additional information on changes in the benefit obligations and fair values of plan assets that will facilitate financial analysis and eliminates certain disclosures that are no longer as useful as when they were first required to be presented. These new Statements are effective for the Company's 1998 year-end financial statements and require restatement of prior year comparative information. The implementation of these new Statements will not affect results of operations and financial position, but may have an impact on future financial statement disclosures. With respect to SFAS No. 131, the Company does not expect to change its operating segment groupings. FORWARD LOOKING STATEMENTS With the exception of historical matters, the matters discussed in this commentary include certain predictions and projections that may be considered forward-looking statements under securities laws, including, but not limited to, those statements under the captions "Results of Operations" and "Liquidity and Capital Resources." These statements are subject to a number of important risks and uncertainties that could cause actual results to differ materially including, but not limited to, economic, competitive, governmental and technological factors affecting the Company's operations, markets, products, services and prices. The Company undertakes no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events or otherwise. -20- PART II - OTHER INFORMATION ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. The information contained in Note 2 to the financial statements contained in this Report on Form 10-Q is here incorporated by reference. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBIT. The following document is filed as an exhibit to this report on Form 10-Q: EXHIBIT NUMBER DOCUMENT ------- -------- 3(a) Amended Articles of Incorporation of Hastings Manufacturing Company filed as an exhibit to the Form 8-K Current Report filed on December 8, 1988, are incorporated herein by reference. 3(b) Bylaws of Hastings Manufacturing Company filed as an exhibit to the Form 8-K Current Report filed on December 8, 1988, are incorporated herein by reference. 27 Financial Data Schedule (b) REPORTS ON FORM 8-K. No reports on Form 8-K have been filed during the quarter for which this report is filed. -21- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HASTINGS MANUFACTURING COMPANY Date: May 14, 1998 By: /S/MONTY C. BENNETT Monty C. Bennett Its Vice-President, Employee Relations, Secretary and Director Date: May 14, 1998 By: /S/THOMAS J. BELLGRAPH Thomas J. Bellgraph Its Vice-President, Finance -22- EXHIBIT INDEX EXHIBIT NUMBER DOCUMENT ------- -------- 3(a) Amended Articles of Incorporation of Hastings Manufacturing Company filed as an exhibit to the Form 8-K Current Report filed on December 8, 1988, are incorporated herein by reference. 3(b) Bylaws of Hastings Manufacturing Company filed as an exhibit to the Form 8-K Current Report filed on December 8, 1988, are incorporated herein by reference. 27 Financial Data Schedule -23-